SHIPPING PROFITS OF FOREIGN CORPORATIONS.

SEC. 1021. SHIPPING PROFITS OF FOREIGN CORPORATIONS. (a) Certain Shipping Operations.— Subsection (b) of section 954 (relating to foreign base company income) is amended by adding at the end thereof the following new paragraph: “(7) Special exclusion for foreign base company shipping income.— Income of a corporation which is foreign base company shipping income under paragraph (4) of subsection (a)(determined without regard to the exclusion under paragraph (2) of this subsection) shall be excluded from foreign base company income if derived by a controlled foreign corporation from, or in connection with, the use (or hiring or leasing for use) of an aircraft or vessel in foreign commerce between two points within the foreign country in which such corporation is created or organized and such aircraft or vessel is registered.” (b) Effective Date.— The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 1975, and to taxable years of United States shareholders (within the meaning of section 951(b) of the Internal Revenue Code of 1954) within which or with which such taxable years of such foreign corporations end,